MANAGING PRODUCT LIABILITY IN THE PHARMA & HEALTHCARE SECTOR

CD: What are some of the key trends in product liability that have affected the pharmaceutical and healthcare sector over the last 12-18 months?

Bell: Recent activity in the industry seems to be focused in two key areas. On the one hand, there is continued interest in concerns that therapies are being marketed or promoted for use beyond approved indications, whether the therapy is a pharmaceutical agent or medical device. On the other hand, there is also interest in whether the labels are accurate and defensible. Both of these product liability issues address the appropriate use and promotion of products, and both have stimulated class action litigation.

Wilkinson: Two interesting trends have emerged recently. First, courts are increasingly limiting the jurisdictions in which manufacturers can be sued following the US Supreme Court decision in Daimler AG v. Bauman. Second, the regulation of pharmaceutical and healthcare companies’ use of social media is rapidly evolving. As to the first, Oklahoma and Illinois state courts, faced with personal jurisdiction challenges from defendants, recently held that they did not have jurisdiction over corporations based solely on the fact that they were alleged to have extensive pharmaceutical or medical device sales in the subject state. Daimler articulates a standard that when a claim does not arise from a defendant’s contacts with the forum state, jurisdiction may be asserted only in forums where it is incorporated, maintains its principle place of business, or is otherwise ‘at home’. These recent decisions appear to restrict plaintiffs to properly bringing suit in forums in the corporation’s home state or in the state where the plaintiff ingested the medication at issue. This developing body of law provides another means by which companies within the sector may have more control over where they face substantial litigation. As to the second, FDA recently released draft guidance concerning the use of social media as it relates to the marketing and promotion of life sciences products. Given the seemingly never-ending increase of society’s use of the internet and social media, this is a key marketplace issue for companies in the sector.